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Stocks hold on to European highs on strong corporate earnings


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European stocks hovered near record highs on Tuesday as traders closely watched corporate earnings and waited for a handful of economic data.

The regional Stoxx 600 index rose 0.3% and the UK’s FTSE 100 gained 0.4%. The Stoxx hit an all-time high on Monday.

The company’s profits published on Tuesday continued to gain momentum, with Paris-based lender Societe Generale and London-based Standard Chartered reporting profits exceeding analysts’ expectations.

StanChart, which focuses on emerging markets, announced a record increase in pre-tax profits to $ 1.15 billion, up 55% from the same period last year. Société Générale unveiled its best first-half performance in five years, exceeding analysts’ expectations for net income by 68%.

Energy group BP, meanwhile, revealed underlying earnings above analysts’ expectations, announcing a $ 1.4 billion share buyback program and an increase in its dividend. The shares rose 5 percent.

This year has brought an exceptionally strong profit season on both sides of the Atlantic. Over half of the reporting season in the United States, 86 percent of companies have exceeded earnings expectations, while in Europe, 55 percent have outperformed so far, according to data from FactSet and Morgan Stanley.

“The still healthy earnings outlook is a key factor in our view that the equity bull market remains on solid footing,” UBS Wealth Management analysts wrote in a note, adding that further help was coming from a US Federal Reserve still favorable.

“The growth rate is flattered by the depressed levels of last year. But the results are still impressive compared to the pre-pandemic benefits, ”they added.

Futures on the S&P 500 index said it would rise 0.4% when markets open in New York, while the technology-focused Nasdaq Composite rose 0.2%.

Data on US factory orders will be released later Tuesday, while the latest US jobs report is due on Friday. Economists polled by Bloomberg expect July’s non-farm payrolls to build on June’s good results. Last week, the Federal Reserve said it had made “progress” towards its goal of achieving full employment.

In Asia, investors have again focused on regulation after Chinese state media criticized the online video game industry, calling it “spiritual opium.” Shares of Tencent, the Chinese internet giant, fell 10.8% before the company announced it would implement new restrictions for minors on its gaming platform.

Competitors NetEase and XD lost 15.7% and 21.8% respectively. The Chinese video game market was worth $ 43.1 billion in 2020, according to Niko Partners, a research and consultancy firm.

Hong Kong’s Hang Seng Index fell 0.2% while China’s CSI 300 was flat, although they rebounded from their worst month in nearly three years. The Hang Seng Tech Index, which includes Tencent and its peers, fell 1.5%.

The Chinese government’s gaming statements are the latest in a string of criticisms Beijing has leveled at tutoring services and tech companies, scaring investors as the government seeks greater control over key sectors of the industry. ‘economy.

Elsewhere, the world’s benchmark Brent crude oil rose 0.6% to $ 73.31 a barrel. The pound rose 0.2% against the dollar to buy $ 1.3915 and the euro gained 0.1 to 1.1881.

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